The hands-on manager

By Nick Smith

Published Tuesday, February 17, 2009

Mike Kobold owns a US-based watch manufacturing company, where he runs the business, designs the products and totally embraces the brand's core value - adventure. He talks exclusively to E&T about his 'hands on' style of management.

"I love watches. I fell in love with them when I was 12 years old. Mechanical watches." Mike Kobold, CEO of the eponymous watch company he founded just over a decade ago, stresses the word as if to imply that this is the only technology that counts.

As we talk in the Explorers Club in New York he removes one of the two timepieces he is wearing to show me in greater detail. It's called 'Spirit of America', a simple, cleanly designed analogue automatic 'wrist instrument'. It's the company's flagship product and most remarkable horological achievement to date. As with all Kobold watches, it is entirely mechanical.

"It's made in America," says Kobold. This is more significant than it sounds. On 4 July 2008, to help celebrate the tenth anniversary of his company, Kobold launched the Spirit of America Automatic - the first all-American designed and manufactured watchcase to come to market in 40 years (some of the components for the movement are sourced from Germany, making the entire product 87 per cent American by component value). Not only is the case, including its bezel, mid-case and caseback, manufactured in Pennsylvania: the crown, crown tube, lug bars and screws are American-made.

The raw material from which each case component is milled is stainless steel, from iron ore mined in western Pennsylvania. The domed sapphire crystal is also grown, cut and polished in the US. "Hence, the Spirit of America Automatic's case is truly 100 per cent US mechanical engineering." Even the alligator skin strap (should you select that option) is made from sustainably farmed gators from the Louisiana swamps.

For Kobold, the challenge of making an American watch has been an adventure in itself. He learned very early on that no one in America was working within the fine tolerances required to produce the watches he wanted to make. "We sub-contracted to companies that make parts for NASA, and even they had trouble with the exactness required for our watchcases and movement parts." But Kobold stuck with it and 'several years and a ton of money' later he feels he's nearly there: "Now our American cases are better made qualitatively than the Swiss ones we used before." He likes the fact that he's beating the Swiss at their own game. "It's amazing", he says. "A kind of myth-busting moment."

American origins

The Kobold Watch Company was formed in 1998 while Kobold was still a freshman at Carnegie Mellon University in Pittsburgh, USA. "I was miserable at school. I was dyslexic and have ADD [attention deficit disorder], which isn't a good thing at a technical school when you're surrounded by really smart people. I was terrible, got really bad marks and reports that just said 'you're a really bad pupil'."

Kobold needed to reposition himself and, having been taken under the wing of a watchmaker in Germany at the age of 16, knew a lot about watch design and manufacture. "I had all this experience, and so while in college I started a watch company as a class project in entrepreneurship. I started with $5,000 and business started to tick over, and month after month it just got bigger and bigger. I sold one watch, two watches, five, ten, and by the end of the year I'd sold 86 watches, which was great." And yet Kobold never thought his class project would become a proper corporate organisation, assuming that he'd have to shut it down when the time came to head out into the real world. "The company gave me focus at school, and I started to enjoy it. On graduating I suddenly found that I owned a real enterprise."

Kobold understandably decided to keep the company, but the problem was "I didn't have much money, because of course you have to advertise a lot, and when you start something with $5,000 money is always short". But over the years the business stabilised and is now an established privately held company. Kobold doesn't talk about turnover, but "we sell between 1,500 and 2,500 watches per year (never more than 2,500), and they're priced between $1,750 and $20,000. It's a good business and I love it. I make a profit and I invest that profit in R&D and new technologies."

A classic 'hands-on manager', Kobold also thinks of himself as an entrepreneur. He states emphatically that he's not a professional manager - he's a manager because he has to be - and makes the distinction between management and entrepreneurship. "An entrepreneur is the guy who starts the company, breathes life into it and makes things happen. But he can also be the guy who brings it crashing down around him if he doesn't have the right managers. I'm incredibly lucky in that I have talented and well-disciplined employees both on the management and the engineering sides. People who I can really trust."

Because of the trust between Kobold and his team he is able to manage 'in absentia' and claims that things happen a lot more smoothly when he is out of the office. "My managers tell me 'Mike, you're holding on too tight', because the entrepreneur has the tendency to want to get involved in everything." He says that he doesn't want to micromanage, but as an entrepreneur he gets obsessed: "You have to remember that when I started out I had no employees, so I was making the watches, designing the watches, shipping the watches, dealing with customers and taking out the rubbish."

Ten years down the line and not much has changed, with Kobold describing one of his many roles as cheerleader for the company for both the outside world - media, clients and suppliers - and the inside world, his team. "I have to motivate them, and I don't like to motivate people with just financial rewards. That goes only so far. You have to motivate people by being in their camp, by listening to them and figuring out new ways of getting them excited. I also host Kobold events and I sometimes get invited to go into the field to do strange things."

Friends in high places

By 'friends' he means hardcore adventurers such as Ranulph Fiennes, the man the Guinness Book of Records calls the world's 'greatest living explorer'. By 'strange things' he means 'getting suckered' into full-scale expeditions to the Himalayas, where he accompanied the veteran Brit to 20,000ft. "I didn't get to the top of Everest," says Kobold, "because I cut my hand open while slicing a salami, which Ran found hysterical. So they put six stitches in me, turned me around and sent me back down."

As with many luxury goods manufacturers, Kobold employs 'brand ambassadors' as a method of taking his message to the market. Fiennes came on board in 1999 as Kobold's first and remains 'brand ambassador in chief'. Although megastars from the world of entertainment such as James Gandolfini and Bruce Springsteen wear Kobold watches, it is the exploring community that provides the brand with its core values.

Other explorers to carry the Kobold brand - Martin Hartley, Ben Saunders and Rosie Stancer - have impeccable credentials, thought of as adventurers who push back the frontiers of what they do. This is important to Kobold, who has adopted the corporate tag 'Embrace adventure' that runs through the Kobold Watch Company.

"Sure, we have racing drivers and rock guitarists wearing our watches", says Kobold, "but that's something that has been covered by many other brands, who are competitors. They do a phenomenal job, but I wanted to use explorers because of my connection with Ran Fiennes."

Design of the times

Fiennes is more than just a face for Kobold. The explorer actually helped Kobold to design the Polar Surveyor, "the first watch of its type, with all the functions that it has, that is completely mechanical". This is more technically impressive than it sounds, because although there's no particular function on the Polar Surveyor that couldn't be designed into an electronic watch, being 100 per cent mechanical it will still perform in temperatures as low as -30ºC, -40ºC and below. "We couldn't have designed that watch without Fiennes, and I saw a theme emerging."

How does the design process work? Does Kobold listen to Fiennes and then go away with a pencil or workstation and start drawing. "No! I'm terrible at drafting. I can't draw a straight line. And I'm not a computer wiz. Big machines scare me. I just dream it up."

In fact, what happens is Kobold listens to what his market is asking for, takes notes about what clients want and then "I'll go away and think for a few weeks. I think about how I can incorporate all those functions. Sometimes you can't. Ran really wanted a navigation system on his watch and there was no way I could do that, because the watch is mechanical and not electronic. I then go back to my suppliers and I tell them this is what I want, here is the spec, make it happen".

As we take a yellow cab downtown to shoot his portrait in front of the famous clock at Grand Central Terminal, I put it to Kobold that what he's doing is good old-fashioned marketing; interpreting the client's needs and translating them into a language his technical people can understand. He agrees: "I'm in between the explorers, the people wearing the watches and the people programming the machines to put out the parts. I'm the interpreter."